Basically, the “no-fault” system separates your auto accident claim into one of two separate categories:
- The first category provides you with reimbursement for reasonable and necessary medical expenditures required to treat and rehabilitate your mind and body, as well as reimbursement for your loss of income during your disability (up to a specified amount allowed by statute). In addition, there are other benefits available under this “no-fault” portion of the claim. The payment of these benefits is made by your own insurance company without regard to your own fault in the accident.
- The second category contains your right to seek recovery (make a claim or sue) from the adverse party for pain and suffering and loss of income (in excess of that covered by no-fault). However, because of the availability of no-fault benefits, Michigan does not automatically allow the accident victim to seek recovery for pain and suffering and for disfigurement after every accident. In Michigan, there are certain minimum “thresholds” established by law that the injured victim must meet before collecting any damages. The “thresholds” include death, permanent serious disfigurement of the body or serious impairment of a body function.